Grain markets started on a positive footing, although as to
whether that can last, soybeans at
least face some key data later.

The Census Bureau will release statistics on US imports for
April for which the figure for soybeans is being closely watched, to show how
much of the oilseed is making its way into the country to resolve the unusually
tight soybean balance sheet.

After all, separate data out at the end of the month, for US
crop inventories as of Sunday, are expected to show the "lowest US June 1
soybean stocks in recent memory", Richard Feltes at broker RJ O'Brien said,
flagging that there is "no indication yet" of a slowdown in the exports sapping
supplies.

Indeed, it is "interesting to note that", whatever occurs on
the flat price, "analogue years of tight old crop US soybean stocks witnessed
renewed strength in August/November futures soybean spreads in mid-June", Mr
Feltes said.

(This after the completion of the, ongoing, roll process
when funds sell out of nearby, soon-to-expire contracts in favour of further
ahead lots, putting unusual pressures on spreads.)

Old vs new

In fact, there is some idea that the US harvest last year
was a little larger than the USDA has factored in, reflected in a lower basis
in the western Midwest than might be expected.

Still, the idea of reviving old crop-new crop spreads
receive some support in early deals on Wednesday, with July soybeans adding
0.3% to $14.85 a bushel in Chicago as of 09:10 UK time (03:10 Chicago time),
retaking its 40-day moving average, while the August contract gained 0.2% to
$14.17 a bushel.

The new crop November lot was 0.1% lower at $12.21 a bushel,
while gaining some support at a 0.2% rise to 4,564 yuan a tonne in Dalian
January futures in China, being pressed by ideas of good US growing conditions.

"Focus is now looking ahead to record production potential
in the US this fall, record production in South America in spring of 2015 and
outlook for record global supplies," said Kim Rugel at Benson Quinn Commodities.

"Weather is seen near ideal for US other than rains across the
northern Plains interrupting planting," although with US soybean sowings
overall running well ahead of average, "any potential crop issues are not seen
in the near term".

Stable corn

Indeed, for corn
too, there is talk that weather has been so benign that the USDA may, in its
Wasde report next week, raise its forecast for the US corn yield, above the
current forecast of 165.3 bushels per acre.

Michael Cordonnier, the influential crop scout, is already
believed to have raised his forecast to 164.0 bushels per acre, from 162.0 bushels
per acre.

Still, downward movement on new crop December futures was blocked
by the losses already incurred in trading down to three-month lows.

The December contract in fact edged 0.25 cents higher to
$4.54 ½ a bushel.

Besides, farmers are unwilling to sell too much at these
lower prices, boosting the cash market basis.

Old crop July corn gained 0.2% to $4.59 ¼ a bushel.

Wheat recovery

Did that mean an end to losses for wheat too?

In early deals, yes.

After 18 losses in 19 sessions, the 20th brought
small gains in Chicago, of 0.5% to $6.15 ¼ a bushel for July delivery, although
with a decent northern hemisphere harvest in most countries bar the US coming on
tap, the grain faces a tough task to mount a sustained recovery.

Indeed, the revival was viewed as largely technical, given
the hugely "oversold" nature of futures after their tumble, which includes
losses in the last 10 successive sessions, the longest losing streak in 20
years.

Mind the gap

One factor absorbing chart watchers is a gap in the continuous
chart for the July wheat contract stemming from three months ago, from $6.10 ½-6.16
a bushel, which some believe may provide
a potential point where futures can at least stabilise.

Indeed, the contract in the last session "came close to filling
the gap down to 6.10 ½ a bushel, which could trigger a dead cat bounce" in
prices.

Still, on the fundamental side, CHS Hedging noted that US
prices may have to do more work to do on the downside, despite the prospect of
a drought-reduced hard red winter wheat harvest.

"US is still uncompetitive with the Black Sea by about 20
cents a bushel," the broker said.

Countering this is a reluctance among growers to sell,
especially marked in hard red spring wheat, which saw a rise in basis on
Tuesday, and which rose on the Minneapolis futures markets by 0.5% to $6.87 ¾ a
bushel for July.

Fund action

Still, there remains the fact of the huge, but falling, net
long position held by hedge funds to factor in.

"The managed fund corn long remains oversized relative to
the last two years, while their wheat long appears increasingly vulnerable
given eroding US wheat export prospects and an uptick in North American hard
red spring wheat production prospects," Mr Feltes said.

Funds' waning optimism is being seen as a factor in soft
commodities too.

In arabica coffee, for instance, "the overall bearishness in
agricultural space is doing little to bolster the waning fund interest" in the
bean, said Sterling Smith at Citigroup.